Executive Context & Challenge
A rapidly expanding polymer packaging company sought rapid entry into northern Indian logistics corridors. Organic greenfield setup was projected to require 24 months of regulatory approvals and equipment lead time.
The board decided to pursue an inorganic acquisition of an operational target manufacturing facility in NCR with established FMCG client relationships.
Aakkam’s Advisory Scope
Aakkam Corporate Solutions was appointed as exclusive transactional advisor for target appraisal, due diligence, and negotiation.
1. Target Evaluation & Financial Modeling
We performed a deep discounted cash flow (DCF) and peer-multiple valuation of the target entity, uncovering hidden inventory obsolescence and unhedged foreign exchange liabilities totaling ₹7.5 Crores that had not been disclosed in early teaser memoranda.
2. Forensic Business & Legal Due Diligence
Our multidisciplinary diligence team executed:
- Customer Quality Audit: Uncovered that 60% of target revenues depended on two short-term supply contracts expiring within 6 months.
- Factory & Equipment Feasibility: Conducted technical capacity utilization reviews with certified plant engineers.
- Corporate Governance Check: Screened statutory filings, tax assessments, and patent assignments.
3. Deal Structuring & Price Negotiation
Armed with factual diligence findings, Aakkam renegotiated the transaction price down from an initial asking valuation of ₹100 Crores to a final closing consideration of ₹85 Crores, structuring 20% of the payout as a milestone-based earn-out contingent on key customer contract renewals.
The Outcome
- Accelerated Go-To-Market: Expanded geographical reach overnight, bypassing a 2-year plant buildout timeline.
- Value Protection: Saved ₹15 Crores in purchase consideration while de-risking customer churn through structured earn-outs.